Mr Cho Yong-moon, 75, spends nine hours a day, five days a week using his free pass on the Seoul subway to shuttle parcels back and forth between clothing and jewellery stores.With pension payments falling short of living costs for many of the elderly, he is among a growing number of senior citizens seen trekking in and out of metro stations in the South Korean capital carrying boxes for “silver service” courier businesses.

“This job isn’t easy, especially when I’m walking up the subway stairs carrying heavy stuff,” said Mr Cho, who earns about 500,000 won (S$610) a month, which is about half what he and his wife need to live on.

“There are limited seats for the elderly in the Seoul subways and I often have to stand for hours.”

Korea’s national pension was not established until 1988 and Mr Cho only contributed enough into the system to now get 600,000 won per month.

His predicament underscores the demographic challenges faced by the nation as the economic growth rate declines and the society ages. It is also a lesson for other countries, including its bigger neighbour China, where pension offerings vary greatly among industries and many provincial funds are in deficit.

“The challenges are magnified for north Asia due to the sheer speed and scale of the demographic change sweeping across the region,” said Dr Park Donghyun, principal economist at the Asian Development Bank in Manila.

“The demographic bonus which contributed substantially to the region’s growth in the past has already turned into a demographic tax.”

Dr Park sees rising poverty among the elderly as potentially the biggest socioeconomic risk to the region.

SINKING INTO POVERTY

Because seniority and pay at Korean companies are typically based on age, many workers get pushed out in their mid- to late 50s before they have saved enough to retire. Multi-generational families in which the elderly live with their children and grandchildren are also in decline, leaving millions of seniors without an adequate safety net.

Korea has the worst elderly poverty rate of any country in the Organisation for Economic Co-operation and Development (OECD). The OECD estimated that the true age at which Koreans withdraw from the labour force was 73 for men and 71 for women in 2014.

“Companies need to change their culture of raising compensation based on seniority, which is one reason why they are reluctant to hold on to elderly workers,” said Professor Shin Kwan-ho, a professor of economics at Korea University in Seoul. “The elderly are healthier now and seniors can also help make up for the decline in the young working-age population.”

Yet options for the seniors trying to start over in the job market are limited, and some are pushed from the top of the wage scale to the bottom. Free travel on the metro, an entitlement for people who are 65 and over, is a key edge for many in the employment market.

The Seoul metropolitan government’s Golden Job centre, which helps the elderly brush up on their skills, focuses on training for roles such as couriers, car park attendants, apartment janitors and librarians.

ELDERLY INTERNS

Mr H M Cho, a 63-year-old who worked for 25 years at some of Korea’s biggest conglomerates, was among those taking courses at Golden Job earlier this month. He is looking to broaden his skills in case he loses the job he got as an intern at a small machinery supplier.

Mr Cho said he got the intern position after offering to work for 25 per cent less than the 2 million won monthly salary advertised by the company.

About 44 per cent of people aged 55 to 79 are recipients of public or private pensions, according to the statistics office. The average monthly payment is 510,000 won, with some people who contributed into private schemes receiving a lot more while about half the recipients get less than 250,000 won, government data show.

Silver services have also popped up across Japan, where about a third of the population is over 60 and the government is gradually raising the age for eligibility for pensions to 65. Some of the elderly in Japan also keep working out of necessity, but the poverty rate for seniors is far lower than Korea’s, and many work part time to supplement pensions or simply to keep active.

About 19 per cent of China’s population will be over 60 by 2020, and this would rise to almost 39 per cent by 2050, China’s Human Resources and Social Security Minister Yin Weimin said last year. While China has some time to prepare, there is much to be done given the patchy state of pension schemes, and the erosion of extended family structures due to decades of the one-child policy.

LIVING COSTS

A survey of middle-income households in Korea found that most estimate their living costs after retirement will be more than double what they expect to receive from the national pension. The survey last month by NH Investment and Securities Co, which polled 1,025 households, found that 96 per cent of the respondents intend to continue working after official retirement to supplement their public and private pension income.

From next year, Korea will have more people aged 65 or above than children aged 14 or below, according to government projections.

That means a future with a lot more seniors shuffling through Seoul’s subways carrying packages for silver services.

Mr Cho Won-dae, 84, who has been at it for a decade, said his advice to others is: “Forget about what your past job was.”

“It’s better to make some money, no matter how little,” said Mr Cho, who earns about 1 million won a month.

”My son’s friend once saw me eating snacks at the subway, but I wasn’t embarrassed at all. You have to be proud of what you’re doing now.” BLOOMBERG